Penny foolish

This is what it's come to for the penny, the vestigial appendix of the U.S. currency system: At the Standard Grill, a trendy Manhattan restaurant, pennies are used as flooring materials. You can view this as a means for rich New Yorkers to reaffirm their high sense of self-worth – in the rest of America, people bend over to pick up pennies. In the 10014 ZIP Code, they're part of the floor!

Or you can view this merely as an economical way for the restaurant to have an unusual floor. As New York Times blogger Stephen Dubner notes, the $2.50 per square foot cost of penny covering is one-tenth that of glass tile. As such, pennies make more sense as flooring than currency. In a typical year, the U.S. Mint produces 8 billion pennies with a face value of $80 million – at a cost of $134 million. Depending on what the market rate is for zinc, there may even be a market incentive to melt down mostly zinc pennies and sell them as scrap metal.

This isn't all that's wrong with pennies. Their value is so tiny compared to the cost of the vast majority of goods that reputable studies conclude they hurt the economy by adding to the time it takes to finish cash transactions.

So how come these taxpayer-subsidized, time-wasting anachronisms persist?

Some point to lobbying groups that have a vested interest in continuing production, such as the zinc industry and Coinstar, the company whose supermarket machines convert change into cash while taking a commission.

Still, the main reasons appear to be congressional inertia and public nostalgia, which combine to keep the U.S. Mint in its counterproductive rut. This year, to mark the bicentennial of Abraham Lincoln's birth, the Mint is issuing four commemorative pennies honoring the 16th president.

This folly may please numismatists, but taxpayers should groan. Even government isn't supposed to be this dumb.